If you’re going to go through your first tax season this year, you might want to brush up on these tax insights. It can help you and your employees avoid a call from SARS.
All the answers to your unique business lifestage questions
Running a retail location means you’ve got staff salaries to pay. And, as tax season rolls in, you don’t want you or your employees to be on the receiving end of a SARS audit.
But, are you ready for the endless barrage of tax-related questions employees are going to be hurtling your way? From dealing with their own e-filing dilemmas to clearing up issues with their IRP5s, it’s safe to say that today is a good day to brush up on your tax acumen 101.
Related: Corporate income tax and small business taxes to know
This year’s tax filing season for your salaried workers will extend from 1 July to 30 November 2017. The tax year ended on 28 February 2017. To file their taxes, your employees will need an IRP5 from you.
As you get your new retail business through its first year of operation, here are three employee-tax dramas that you can mitigate by learning how to respond appropriately:
1. “I don’t know what to do with my IRP5”
When one of your employees comes to you with a question related to their IRP5s, maybe these insights will help?
- An IRP5 contains all your employees’ personal details, details of their earnings, and all deductions made from their incomes like medical aid contributions in the case of store managers – or things like pension funds and RAs, UIF contributions, and PAYE knock-offs.
The IRP5 is used to populate the return that your employee must officially submit to SARS via its e-filing platform.
2. “My previous employer didn’t give me an IRP5”
Whether you’re running a large, multi-platform retail operation or a single retail store with staff that run it on a daily basis, it’s every employers’ responsibility to prepare and submit an IRP5 on their employees’ behalf to SARS.
If you do not provide your employees with an IRP5, regardless of their income level (as long as they are full-time employees), they can report your company to SARS. Every business that does not abide by its requirement to provide IRP55s can also be held liable for penalties for failure to meet tax responsibilities.
Related: Overview of small business tax
3. “Do I really need to submit a tax return on my salary?”
While you need to provide IRP5s and record every minute detail of how you reward an employee, not all of them are required to submit a return to SARS. If they ask what they should do, consider this:
They do not need to file a return if their total salary earned during a tax year is not more than R350 000 (before tax), provided:
- They only have one employer (You).
- But if they work two jobs and have two different employers or income sources, they do need to file even if the total is still under R350 000.
- They have no car allowance or other income (like interest from investments or rental incomes).
- They are not claiming tax-related deductions (like medical expenses or retirement annuities or travel expenses).
- They have received interest from a source in South Africa not exceeding –
- R23 800 if they are below the age of 65 years;
- R34 500 if they are aged 65 years or older.
For more information on what you need to prepare for when it comes to tax season this year, a Standard Bank retail sector expert is at your disposal. Click here to get in touch.
- This year’s tax filing season for your salaried workers will extend from 1 July to 30 November 2017.
- Whether you’re running a large, multi-platform retail operation or a single retail store with staff that run it on a daily basis, it’s every employers’ responsibility to prepare and submit an IRP5.
- If you do not provide your employees with an IRP5, regardless of their income level (as long as they are full-time employees), they can report your company to SARS.